Investor-state Dispute Settlement Provisions Research Articles

Standing in international investment and trade disputes

International investment agreements employ dispute settlement procedures that differ markedly from their counterparts in trade agreements. A prominent and controversial difference arises with respect to the issue of “standing”: Who has the right to complain to adjudicators about a violation of the agreement? While trade agreements limit standing to the member governments (state-to-state dispute settlement), investment agreements routinely extend standing to private investors as well (investor-state dispute settlement). We develop parallel models of trade and investment agreements and employ them to study this difference. We find that the difference in standing between trade and investment agreements can be understood as deriving from the fundamentally different problems that these agreements are designed to solve. Our analysis also identifies some important qualifications to the case for including investor-state dispute settlement provisions in investment agreements, thereby offering a potential explanation for the strong political controversy associated with these provisions.

Withdrawal from mixed agreements under EU law: the case of the Energy Charter Treaty

This article argues that under EU law, the EU and its Member States can withdraw from a multilateral agreement such as the Energy Charter Treaty independently of one other. While loyalty obligations may require the EU and its Member States to coordinate their actions under a mixed agreement closely, all can withdraw. The autonomous nature of EU law does not allow Member States to prevent the EU from taking decisions within its competence. Similarly, as the European Court of Justice maintains, under EU law, the EU and its Member States are only ratifying those parts of the agreement that fall within their competence – thus, Member States are entitled to cease exercising their powers through withdrawal. However, this power to withdraw unilaterally is not without complications. First, it may affect the ability of others to remain a party to the Energy Charter Treaty under EU law. Second, where not all Member States and the EU withdraw, ‘incomplete mixity’ raises several complicated questions under international law, particularly those concerning international responsibility and investor-state dispute settlement provisions. Coordinated withdrawal by all Member States and the EU is, therefore, the preferred policy option.

Provisions on frivolous claims in the European Union – Vietnam investment protection agreement – would they be benefits to Vietnam?

PurposeThis paper aims to examine two issues: whether provisions on frivolous claims in the European Union (EU)–Vietnam Investment Protection Agreement (EVIPA) would be Vietnam’s intrinsic demand, and to what extent, Vietnam may enjoy the benefits from these provisions.Design/methodology/approachThis paper combines both doctrinal legal analysis and policy research. It offers an in-depth case study of the provisions on frivolous claims in the EVIPA, compares them with those of other existing international investment agreements and arbitrations rules, examines how similar provisions in these instruments are interpreted in available practical international investment disputes, uncovers the Vietnam’s position through interviewing Vietnamese senior experts, who were members of the Vietnamese delegation negotiating the EVIPA, and through available collected data and then evaluates whether these provisions may be favourable to this country.FindingsWhile the new investor-state dispute settlement (ISDS) mechanism in the EVIPA can be viewed as explicit evidence of the EU’s achievement, it may also be Vietnam’s benefits to entertain new ISDS provisions on frivolous claims. They were drafted, based on the ISDS arbitration practice, states’ experience and actual situations in Vietnam. These novel provisions, among other things, serve as Vietnam’s prerequisites to consider whether to accept the new two-tier standing mechanism or not. The inclusion of such ISDS provisions in the EVIPA, therefore, is supposed to meet the Vietnam’s intrinsic demands for defending against unfounded frivolous cases.Originality/valueThis is the first time the EU concluded an investment treaty containing innovative ISDS provisions with a developing country. This paper therefore may help envisage Vietnam’s perspective during its negotiation of provisions on frivolous claims in the EVIPA and prove that the avails of these provisions to a frequent respondent State like Vietnam can be realised. The paper’s findings mean for research in investment law as well as for policymakers as far as the frivolous cases are concerned.

An optimal investor-state dispute settlement mechanism

Many investment treaties include investor-state dispute settlement (ISDS) provisions which are supposed to protect a foreign investor against opportunistic behavior of a host country. This paper scrutinizes the optimal design of ISDS provisions that solve the holdup problem. It shows that an efficient investor protection mechanism requires an arbitrator as established in investment treaties. However, this arbitrator does neither have to learn nor to evaluate the circumstances of the dispute. Furthermore, any ISDS compensation from the government to the investor should not be based on reductions in investor profits but on the host country’s welfare effects.

The growing pains of actorness: the European Union in global investment governance

ABSTRACT Foreign investment is governed by thousands of international investment agreements (IIAs), many of which include investor-state dispute settlement (ISDS) provisions. Member states have played a prominent role in the evolution and shape of this decentralized global investment regime. The EU itself has become an actor in this regime since gaining competence in this area in 2009. This article examines the manners by which investment policies of the EU and its member states have evolved over time and their implications for the EU’s actorness. Using, first, the concept and metric of state regulatory space, we show that the EU is more enthusiastic than its member states about reforms, but that a lack of internal cohesiveness and a competitive external environment limit its actorness. Second, drawing on recent discussions on ISDS reforms, we highlight the increasing ability of the EU to speak up with one voice on global investment rules.

Conciliation and Mediation in Investor-State Dispute Settlement Provisions: A Quantitative and Qualitative Analysis

Abstract The article sets out the results of an extensive review of conciliation and/or mediation in investor-State dispute settlement (ISDS) provisions contained in international investment agreements (IIAs). Out of 3815 IIAs that were initially screened, 2674 (ie 70 per cent) do not refer to such provisions. The research also revealed that while the number of IIAs signed each year with investor-State conciliation provisions have significantly decreased, IIAs signed with investor-State mediation provisions are gradually increasing. The screening identified 1125 IIAs that contain investor-State conciliation provisions, of which 806 (ie 71.6 per cent) provide advance consent to conciliation. In comparison, of the 53 IIAs that were found to contain investor-State mediation provisions, only seven (ie 13.2 per cent) offer advance consent to mediation. Advance consent to ‘conciliation or arbitration’ was identified in 703 IIAs. The authors outline arguments to show that the conjunction ‘or’ in these provisions does not give rise to a fork in the road that precludes an investor’s right to arbitration if it first initiates conciliation proceedings. Only seven IIAs were found to require conciliation and/or mediation as a mandatory precondition to arbitration. The article concludes with recommendations to increase the use of investor-State conciliation and mediation provisions in future IIAs and also to improve the quality of those provisions.

ISDS Reform in the Context of China’s IIAs

Abstract The investor–state dispute settlement mechanism enables investors to seek remedies in the face of a violation of related international investment agreements, which are crucial to maintaining the standards of investor protection that have been consented to by the contracting parties. On the other hand, more and more problems in the system have been exposed as the number of investor–state dispute settlement cases has increased. These range from substantive issues, such as the treatment granted to investors, to procedural ones, such as cost management and related procedures. Debates on investor–state dispute settlement reform have led to various options for reshaping the relevant mechanisms. Amid the new trend of investment liberalization and facilitation, China is undergoing a new round of bilateral investment treaty revision and free trade agreement negotiation. How the investor–state dispute settlement process is to be framed boils down to how China assesses its own interest vis-à-vis its partners and how it prioritises its objectives in international investment agreement negotiation with its partners. It is submitted that China should take a calculated risk on the investor–state dispute settlement provisions in international investment agreements with adequate consideration of competing interests.

China\u2019s Stance on Investor-State Dispute Settlement: Evolution, Challenges, and Reform Options

China is one of the most active states in concluding bilateral investment treaties (BITs) globally. Its BITs can be categorized into three generations based on the homogeneity of the investor-state dispute settlement (ISDS) provisions within each generation. The China–EU Comprehensive Agreement on Investment and the China–US BIT under negotiation are expected to inaugurate a fourth generation, although China’s stance on ISDS in both treaties remains indeterminate. This article elaborates on the distinctive characteristics of ISDS provisions by mapping three generations of Chinese BITs, presenting the challenges that these ISDS provisions have brought to light in investor-state adjudication as well as in the context of the Belt and Road Initiative, and expounding on China’s policy options in ISDS reform. The on-going intense debate on ISDS reform presents China with an opportunity to shift from its traditional role of a rule-taker to a rule-maker in redesigning the ISDS mechanism. However, China’s current policy and practice do not demonstrate an ambition for such a transformation. Looking forward, it may well be in China’s long-term interest to endorse a Multilateral Investment Court as vigorously advocated by the EU.

Why States Should Have ISDS: The Private Sector Perspective

The system of International Investment Agreements and the Investor State Dispute Settlement provisions contained therein was developed primarily for the benefit of international investors; this was seen as a method of increasing the flow of foreign direct investment into developing nations which would benefit developing countries. While the views of governments, international organizations and NGOs have been solicited and welcomed regarding changes to the system of IIAs and ISDS, the view of industry/investors has not been heard often. This paper looks at the views of industry and investors on these topics; their views are quite opposite to those commonly put forward by the others. One of the key elements is the perspective that sophisticated enterprises that care about sustainability issues such as human rights, environmentalism, corruption free operations, are well aware of the benefits that IIAs provide, particularly with the obligations of the state are enforceable through ISDS. These provide security to the enterprise to invest. Without them, they are less likely to invest in the state. Instead, exploitative capital will flow into the state. Exploitative capital does not have concerns regarding sustainability, human rights, corruption, environmental issues, as the only goal of exploitative capital is to make maximum profits as quickly as possible. Investors are now aware that in the absence of ISDS provisions, there are no legal venues for an investor to have a claim adjudicated. Even with ISDS provisions in place, states will rarely settle claims prior to a final arbitration award. Yet, the movement towards replacing arbitration with mediation, thereby depriving the investor of any legally binding award is seen as exacerbating the problem of states not settling claims. With that system, they will have no motivation to settle via mediation since there is no potential for a binding award to be made against them if they refuse to settle via mediation. Many of the fears expressed regarding investors misusing the ISDS provisions have been shown to be misguided, particularly now with processes in place to quickly stop clearly unmeritorious claims, as well as the cost of bringing such claims being so high.

Novel and Noteworthy Aspects of Australia’s Recent Investment Agreements and ISDS Policy: The CPTPP, Hong Kong, Indonesia and Mauritius Transparency Treaties

Investment treaties, and especially investor-state dispute settlement (ISDS) provisions, became a political hot potato from around 2011 when Philip Morris brought the first-ever ISDS claim against Australia under an old bilateral investment treaty (BIT) with Hong Kong. A Labor-Greens Government declared that it would no longer agree to ISDS provisions in future treaties, but when a centre-right Coalition Government regained power from 2013 it reverted to concluding treaties containing ISDS clauses on a case-by-case assessment. Australia therefore agreed to ISDS in FTAs with Korea and China, but not bilaterally with Japan. However ISDS-backed provisions apply between Australia and Japan since the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) can into force between them (and five other Asia-Pacific nations so far) from January 2019. Yet the Australian parliament engaged in robust debate about ratification of the CPTPP, with Labor Opposition (and Greens) parliamentarians continuing to voice concerns over ISDS provisions, despite the Philip Morris claim against Australia’s tobacco plain packaging having been rejected on jurisdictional grounds in 2015. This paper examines how (US-style) CPTPP drafting compares with two important recent investment agreements subsequently signed by Australia over 2019, namely with Indonesia as part of a wider free trade agreement (IA-CEPA), and with Hong Kong (AHKIA, alongside a bilateral FTA covering non-investment matters). AHKIA came into force from 17 January 2020, while IA-CEPA has been ratified by Australia but not yet by Indonesia. IA-CEPA adds a provision unique in the universe of over 3000 investment agreements world-wide, probably proposed by the Indonesian side: a compulsory mediation step prior to arbitration, if the host state requests mediation after the foreign investor initiates ISDS. The paper also highlights other features of both treaties that may help reduce delays and hence costs in ISDS. The paper summarises empirical data about delays and costs, as well as transparency around ISDS as another growing public concern, including some of our own empirical data provided as evidence to an Australian parliamentary inquiry into ratifying the CPTPP. We also examine the 2019 parliamentary inquiry that agreed with the submission that Australia should ratify the Mauritius (“UN ISDS”) Convention, thereby retrofitting extensive transparency provisions on pre-2014 treaties between Australia and other states that might also accede to that framework Convention. Even if Mauritius Convention ratifications proliferate, however, it will not retrofit extra transparency provisions to treaties concluded even after 1 April 2014 even among those states (say between Australia and Indonesia, where the investor chooses the ICSID Rules rather than UNCITRAL Rules option for arbitration). Accordingly, states ratifying the Mauritius Convention will still need to agree bilaterally to expand any still-limited transparency provisions in such post-2014 treaties, which is quite inefficient compared to a multilateral solution. Nonetheless, we conclude from these new developments that Australia is now better placed to play a more active role in guiding the future path of international investment treaty-making multilaterally and especially in the Asia-Pacific region.

Vattenfall in the Aftermath of Achmea: Between a Rock and a Hard Place?

On 6 March 2018, the Court of Justice of the European Union (CJEU) issued its judgment in the case between Slovakia v. Achmea BV (Case C-284/16). The CJEU ruled that the investor-state dispute settlement (ISDS) provisions in the Netherlands-Slovakia bilateral investment treaty are incompatible with the principle of autonomy of EU law. This addressed a highly controversial issue that has been lingering for years: whether bilateral investment treaties (BITS) concluded between EU Member States are compatible with EU law. The judgment has caused controversy amongst scholars and international practitioners, and its significance is undeniable. Yet, the judgment has led to many unanswered questions, including, inter alia, what EU law requires of arbitral tribunals in such cases, how the seat of the arbitration tribunal may affect the outcome of the above judgement and whether the outcome of the judgement is limited to intra-EU BITS. This Article will reflect on these open issues and will endeavour to respond such issues by examining the application of the above ruling in the context of the case Vattenfall AB and others v. Federal Republic of Germany (II) (ICSID Case No. ARB/12/12) as well as other recent investment arbitration decisions.

The New NAFTA: Scaled-Back Arbitration in the USMCA

In December 2018, the United States, Mexico, and Canada entered into the United States- Mexico-Canada Agreement (USMCA), a new multilateral investment agreement to replace the 1994 North America Free Trade Agreement (NAFTA). This article summarizes the differences between the investor-state dispute settlement (ISDS) provisions provided in Chapter 11 of NAFTA and those covered in Chapter 14 of the USMCA from the perspective of the United States, Mexico and Canada. This article covers when an investor can assert claims under the USMCA (including NAFTA claims for legacy investments), what kind of claims can be brought, and what rules govern in USMCA arbitrations. The authors of this article conclude that the USMCA provides diluted ISDS provisions compared to NAFTA’s Chapter 11.

Islamic legal tradition and the choice of investment arbitration forums

Does domestic legal tradition affect international cooperation and legalization? Recent studies indicate that states with Islamic law tradition (ILT) prefer more informal forums to resolve international disputes, compared to states with other legal traditions. We examine this claim in the context of the increasingly important global investment regime. We argue, specifically, that international investment agreements (IIAs) concluded by ILT states are less likely to refer disputes to the highly legalized and formal Centre for the Settlement of Investment Dispute (ICSID), and are more likely to refer them Islamic forums, which tend to be less formal. Employing new data on forum choice in investor-state dispute settlement (ISDS) provisions in more than 2,600 IIAs and controlling for a battery of alternative explanations, we find substantial empirical support for the theoretical expectations. These findings underscore the significance of domestic legal traditions to international dispute settlement in the Islamic world and beyond.

Asia-Pacific Free Trade Deals Clash with GDPR and Convention 108

Two distinct worlds of international agreements – concerning free trade and data protection – are now colliding due to provisions which may impose incompatible obligations on parties to both types of agreements. On the one hand, new Asia-Pacific free trade agreements (FTAs) include strict limits on how legislation can restrict personal data exports or require data localisation. On the other hand, the EU’s GDPR, and Convention 108/108+ require countries’ laws to impose restrictions on data exports if those countries wish to be held to provide ‘adequate’ protection, or to accede to the Convention. Mexico and Japan are the first countries where a clash of these obligations requires resolution, but similar clashes may soon arise in relation to Canada, New Zealand, and potentially other countries. This article explains how and where these conflicts are arising. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP – the ‘new TPP’) comes into force on 30 December 2018 because six of the eleven signatories (Mexico, Canada, Japan, New Zealand, Australia and Singapore) have ratified it and deposited their agreements (only four were needed). It comes into force between ratifying parties. CPTPP’s implications for privacy legislation are primarily that (i) it imposes an onerous Four-Step-Test’ for any exceptions to its prohibition on data export limitations. There are similar data localisation prohibitions. State party dispute settlement provisions can result in a panel awarding monetary assessments against a party, and in some limited situations Investor-state dispute settlement (ISDS) provisions could apply. The United States – Mexico – Canada Agreement (USMCA – the ‘new NAFTA’) was agreed to on 1 October 2018, but is yet to be ratified and come into force. The test for data export restriction limitations, although using different words, is in substance the same as in the CPTPP. ‘Data localisation’ by requiring local processing is prohibited, and there are no exceptions, unlike the CPTPP. The requirements of both the CPTPP and the USMCA require careful consideration by any of their Parties who are already Parties to Council of Europe data protection Convention 108 and its 2001 additional Protocol, or intending to accede to Convention 108+, or have obtained an adequacy decision by the EU or are attempting to obtain one under the GDPR. This article considers the position of Mexico, due to its accession to Convention 108 on 1 October 2018, its ratification of CPTPP, and potential ratification of USMCA. It also considers the position of Japan, due to it being about to obtain a positive ‘adequacy’ assessment under the GDPR from the EU, and its ratification of the CPTPP. Canada is in a similar position, and other countries may become so. When worlds collide, the results are unpredictable.

Biosecurity, Investor-State Dispute Settlement and Corporatogenic Climate Change: A Challenge for Australian Public Health Regulation and Human Rights

It is a politically controversial but by no means scientifically contentious hypothesis that many of the root causes of contemporary climate change emerge from the profit-seeking activities of multinational corporations – for instance in the oil, coal, deforestation and livestock industries. Contemporary corporatogenic warming of the climate is recognised scientifically as not only having tragic environmental consequences, but also creating significant biosecurity risks. Using the 2008 Dengue Fever outbreak in Northern Queensland as a critical focal point, this article explores the implications of corporatogenic climate change to Australian biosecurity in the context both of Australia’s new federal biosecurity legislation (Biosecurity Act 2015 (Cth)) and the investor-State dispute settlement provisions of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) particularly as they may impact the health and international human rights of Australia’s northerly indigenous populations.

Reasons not to exit? A survey of the effectiveness and spillover effects of international investment arbitration

One of the most important characteristics of an investment treaty is that often it grants aggrieved investors access to international arbitration. This arbitration system does not require a foreign investor to petition his home state in order to bring claims against a host state, and provides an alternative to resolving disputes in the host state’s local court. Although international investment arbitration is beneficial for countries in terms of foreign direct investment, it has been accused of not being transparent or effective especially in relation to environment or public health cases. Some countries expressed their discomfort with the current international investment law regime by radical exit solutions such as denunciation of the Convention on the settlement of investment disputes between states and nationals of other states, rejection of investor-state dispute settlement provisions and unilateral denunciation of investment treaties. Based on a vast law, economics and political science literature, this paper proposes arguments to examine these criticisms. First, it is argued that investor-state arbitration is currently a concern in both developing and developed countries. Second, although assessing the spillover effects of arbitration outcomes on some dimensions of public interests such as the environment or public health is not straightforward, the uncertainty that leads to arbitrariness and sometimes inconsistencies in arbitral decision-making exists and needs to be properly identified. Finally, this article argues that exit is not efficient at either the national or international levels, and that it is possible for countries to adapt the current regime to new situations without wholesale exit.

Investor-state dispute settlement and infrastructure projects: a potential impediment to good engineering and planning outcomes in Australia?

ABSTRACTOver recent years, Investor State Dispute Settlement (ISDS) clauses have been a feature of Australia’s negotiations of Free Trade Agreements (FTAs). ISDS clauses are drafted to provide increased protections for foreign investors of the contracting country parties. Some Australian newspaper journalists, politicians, academics and NGOs continue to promote the view that such provisions will disadvantage Australia. The paper explains the ISDS provisions, enumerates the number of bilateral investment treaties and FTAs to which Australia is party and notes whether they include ISDS provisions. The authors explore whether the ISDS provisions pose a real threat to good engineering and planning outcomes which might impact adversely on infrastructure investments by foreign enterprises. Whilst the initial impression, based on a little known but significant toll road arbitration case from Thailand, is that the potential risk is relatively high. Closer analysis, however, shows that the risk to Australian governments is probably moderately low and can be mitigated further.

Investor State dispute settlement provisions in India’s model bilateral investment treaty: a critique

India’s Model BIT includes detailed provisions that aim to regulate access to Investor State Dispute Settlement (‘ISDS’) mechanism. Several law and policy matters have been excluded from ISDS scope, pursuit of local remedies by investors has been made mandatory, and, procedural and temporal pre-conditions have been prescribed in order to file arbitration claim. This paper evaluates whether the ISDS mechanism in India’s Model BIT strikes an appropriate balance between investor rights and a sovereigns’ public policy prerogatives. In order to determine the same, the paper analyzes ambit of ISDS scope exclusions; scope for review of States’ action on excluded matters and possibility of claiming reparations under the BIT for losses consequent thereto; and, feasibility of pursuing local remedies. This paper concludes that India’s Model BIT tilts the scale in favour of the State vis-a-vis investors because by restricting access to ISDS mechanism, investor rights would effectively be weakened.

Investor-State Dispute Settlement and Indonesian Reform Policy in Mining Downstream Sector

To date, Indonesia has been facing the seventh ISDS (Investor-State Dispute Settlement) lawsuit case in ICSID, the most number of ICSID cases a particular country has in ASEAN. In the meantime, Indonesia had to initiate reform in its minerals mining sector policy since the sector had provided little benefit in Indonesian sustainable economic development thus far–a policy reform which is potentially highly exposed to ISDS lawsuit case. Yet, the reform once issued has no turning back and thus it should move forward. Indonesian reform policy to support more its mining downstream by Minerba Act issuance is intended to benefit from its scarce, limited non-renewable minerals so as to support national development and maintain its long-term interest and economic sustainability. Undoubtfully, the policy reform will be beneficial for Indonesian economy sustainability and thus it should be protected from any potential ISDS claims in the future. This study seeks to address such real, critical current challenges arising from contingent ISDS claims towards Indonesia. This study adopts a descriptive analytical method, which combines literature review, authors’ shared expertise in this field, and results of interviews and discussions with several other experts in relevant fields. This study concludes that in addressing ISDS contingent problems threatening Indonesian current reform policy in mining downstream sector, Indonesia should focus the emphasis on the prevention endeavor, those are a review of BITs and IIAs containing ISDS provisions; improvement in investment dispute management; which are mainly supported by continuous bureaucracy reform, capacity building, and better coordination.

Jumping Back and Forth between Domestic Courts and ISDS: Mixed Signals from the Asia-Pacific Region

It is uncontroversial that cross-border investments engender the possibility of disputes arising between investors and host States. What is unclear is whether such disputes should be characterized as being unique or distinctive because they involve foreign investors. What is further in controversy is whether there should be a customized mechanism to resolve such disputes. The institution of investor–State dispute settlement (ISDS), which has for some time enjoyed popularity as a way of resolving investor–State disputes, has come under renewed scrutiny over the past few years as a result of dissatisfaction articulated by a number of countries. Many South American and Asian countries have expressed concerns over the nature of ISDS and the organizations that facilitate it. This includes Nicaragua and Venezuela signalling an intention to terminate existing bilateral investment treaties (BITs), and Ecuador denouncing the International Center for Settlement of Investment Disputes (ICSID) established by the World Bank, which is the primary source of investment arbitration. In 2007, the Philippines negotiated to exclude ISDS in its free trade agreement with Japan.4 In March 2014, Indonesia indicated that it would terminate its BIT with the Netherlands and likely implement a scheme of terminating all of its remaining BITs as they become due to expire. In 2011, the Commonwealth Government of Australia stated in a Trade Policy Statement (‘the Policy’) that Australia would no longer agree to the inclusion of ISDS in its future bilateral and regional trade agreements (BRTAs), choosing instead to rely on alternatives to ISDS. After a change in Australia’s Government in 2013, two years after the Policy was announced, the new Liberal–National Coalition Government has retreated from that Policy notably by including an ISDS regime in the Korea–Australia Free Trade Agreement (KAFTA) concluded on 5 December 2013, and the China–Australia Free Trade Agreement (ChAFTA) concluded on 17 June 2015. References to the Policy have been removed from the Department of Foreign Affairs and Trade’s official website, which indicates instead that it will consider the inclusion of ISDS on a case-by-case basis.8 Further, the Government has categorically stated that Australia’s ability to pass public interest legislation, such as in the areas of national security, public health, and environmental protection, will not be compromised. Notably, the Japan–Australia Economic Partnership Agreement (JAEPA), concluded in April 2014, does not include an ISDS regime. Australia is currently in bilateral negotiations with Indonesia and India, as well as having a stake in the imminent Trans Pacific Partnership Agreement (TPPA). It is not clear what negotiation stance the Australian Government is likely to take with respect to these instruments. In formulating national investment policy, including with respect to ISDS, governments should seek to adopt measures that pursue broader economic development, encourage responsible investor behaviour, and are practical in ensuring policy effectiveness. These principles, addressing concerns about investment policy generally and ISDS in particular, are reflected in global debate over sustainable development, notably in the UNCTAD’s Investment Policy Framework for Sustainable Development (IPFSD). In light of a broader framework for sustainable development of investment policy, this chapter will consider the value of ISDS in resolving disputes between host States and foreign investors, particularly in the Asia Pacific region. It will argue that the oscillation between ISDS and domestic courts serves to destabilize international commerce as well as comity between states. It will recommend, in response, potential developments to the substantive and procedural execution of ISDS provisions. The chapter will focus on the policies articulated by Australia in its Policy Statement in 2011 and then in 2013. The chapter will also construe the positions adopted by a number of Asian countries as examples of developments taking place within the region and the potential future of ISDS regionally as well as internationally.